The present invention relates to a system and method for a complete ordering to payment allocation system, and in particular, to a system and method which accepts orders from customers located at distributed locations, manages the ordering process by presenting a consolidated invoice to the seller, allows the seller to indicate which items are being paid along with a reason code for items for which payment is being withheld, accepts a consolidated payment, and allocates that payment to the appropriate selling subsidiary.
As the global economy continues to flourish, increased demands are being placed on sellers to provide consolidated invoices, i.e., statements, to buying companies. This task is particularly difficult because orders from a large buying entity are typically received from many subsidiaries within the buying entity and from many geographically distributed locations. The buyers often remit payments, or partial payments, for the consolidated invoice to the seller. As a result, the seller is unable to determine exactly which items on the invoice are being paid, and which items are exceptions or are in dispute. As used herein, the terms “exception” and “dispute” are used interchangeably. In general exceptions and disputes differ from one another in terms of degree of severity, a dispute rising to the level of an unresolved exception which requires human intervention.
In order to determine which items are exceptions or are in dispute, a representative from the selling company must contact one or more representatives of the buying company in an attempt to reconcile the invoice items. The representatives must then work to resolve the exceptions and disputes. Exceptions and disputes can arise, for example, when an item is not received by the buyer, when the item is defective or when the item received is not the item which was ordered. The dispute/exception determination and resolution process can be time consuming, and can prevent the seller from properly allocating the portion of the received payment to the correct selling subsidiary.
The difficulties described above are further exacerbated when the buying company's representatives are internationally distributed, and are ordering from internationally distributed selling subsidiaries. In this case, issues of foreign exchange further compound the invoicing, consolidation and payment allocation processes. Current processes typically require multiple foreign exchanges and currency conversions. These foreign currency exchanges are costly, even when the buyer has used a credit card to pay for the ordered goods.
Large buyers, particularly buyers from a company which has many international locations, want to receive one main bill in one currency, for example, U.S. dollars, and regional bills for the international entities in local currencies so that the international locations know what their cost will be, even if the actual invoice is paid in the currency corresponding to the main bill.
In addition, large companies want to effectively meet the regulatory requirements affecting their entities in a manner which still allows the maximization of profits. As such, both buyers and sellers must report and manage their systems and processes to satisfy local tax and regulatory issues.
It should be noted that the terms “goods,” “services” and “items” refer to those things ordered by a buyer and are used interchangeably herein.
An example of a prior art sales system is explained with reference to FIG. 1. FIG. 1 is a block diagram of prior art sales system 2. In this type of system, buyers 4 from different buyer locations 6 each individually order items from a seller by contacting a seller division 8. In the case of sales system 2, different buyers, even from the same buying location 6, place orders directly with the subsidiary which will supply the item. Seller divisions 8 can be geographically separated across international boundaries. The arrangement of sales system 2 makes invoice consolidation virtually impossible.
As a result, each seller division 8 prepares a separate invoice for each buyer location 6. The buyer 4 at each buyer location 6 must then cull through the invoices, often paying each invoice separately through the issuance of multiple checks, wire transfers, etc. In addition, should a dispute or exception arise, buyer 4 will typically not authorize payment for the entire invoice until the dispute or exception can be resolved. Buyers 4 often will not make it clear which items on an invoice are exceptions or are in dispute. Thus, the seller has no way to know that there is an exception or dispute until the partial payment is received. This prolongs the time in which the seller must wait to receive payment because the dispute/exception resolution process does not start until the seller receives the partial payment.
Using the model of sales system 2, the process often implicates the seller's bank, because the bank might receive an electronic wire transfer or lock box payment, part of which is in dispute, with no way to accurately determine which seller division 8 should receive credit for the deposit. This situation is particularly onerous in the case where seller divisions 8 are distributed across international boundaries such that foreign exchange procedures must also be considered. Thus, prior art sales system 2 does not allow for invoice consolidation, efficient invoice verification by the buyer, allocation of payments to the appropriate subsidiary and an environment where disputed payments are made known to the seller prior to receipt of the partial payment.
With the proliferation of global computing networks, such as the Internet and private networks, many sellers have implemented network-based ordering systems, an example of which is shown in FIG. 2 and is designated as ordering system 10. Systems such as ordering system 10 facilitate the ordering and booking of buyer purchases, but do not solve the problems of invoice consolidation, order verification, exception resolution and payment processing. As shown in FIG. 2, buyers 4 at buyer locations 6 use network 12 to access seller web site 14. Network 12 is typically a private network or the Internet. Seller web site 14 typically runs on a processing server and is arranged to accept order's from customers with prearranged accounts, or from a customer who supplies a credit card number used to pay for the ordered items. Seller web site 14 then electronically distributes the received orders to the appropriate seller geography 16. Distribution is typically based on a correlation between the geography of the ordering buyer location 6, or the geography which can fill the order in the must expedient manner.
In a typical seller web site 14, buyers are presented with an opportunity to browse through the seller's product offerings, and can build an electronic list of items to be purchased, and subsequently invoiced. These invoices, however, are not consolidated, and are presented in bulk back to the original buying location 6 or to the buyer's main designated location. In addition to the inability to prepare consolidated invoices, systems such as ordering system 10 do not allow buyers to electronically verify that their orders have been received or to indicate the allocation of the payment to received items to facilitate the exception resolution process. The systems also do not allow the seller or seller's bank to allocate the received payment to the appropriate geography 16 or to transfer received funds to the geography's corresponding banks or bank accounts.
In sum, there is no existing system which provides an end-to-end “quote-to-payment” system which allows a seller to accept and book orders, prepare a consolidated invoice for the buyer, allow the buyer to electronically view the consolidated invoice, verify those items for which a consolidated payment is being remitted, begin dispute and exception resolution procedures, receive the consolidated payment, allocate the payment to the individual subsidiaries (geographies, divisions, locations, etc.) and transfer funds to banks or bank accounts associated with those selling entities.